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GRAZING LAND POLICIES IN TEN WESTERN STATES 



DEPT. OF THE INTERIOR 

NOV 13 1961 I 
E^IL.U \TEuD 

BUREAU OF LAND MANAGEMENT 
PORTLAND, OREGON 





UNITED STATES DEPARTMENT OF THE INTERIOR 
Stewart L. Udall, Secretary 

BUREAU OF LAND MANAGEMENT 
Karl S. Landstrom, Director 



HP 





October 1961 



241 
MB 

c.3 



-deral Center 
Denver, CO 80225 



GRAZING LAND POLICIES IN TEN WESTERN STATES 

c,3 

A Study and Evaluation of the Policies, Practices, 

Procedures and Values Pertaining to Grazing Lands 

Under the Control of Ten Western States 

by 
Murray E. Morgan 



Bureau of Land Management 
Library N 

Bldg. 50, Denver Federal Center 
Denver, CO 80225 



UNITED STATES DEPARTMENT OF THE INTERIOR 
Stewart L. Udall, Secretary 

BUREAU OF LAND MANAGEMENT 
Karl S. Landstrom, Director 



BUREAU OF LAND MANAGEMENT LIBRARY 

Denuer, Colorado 



88615511 



GRAZING LAND POLICIES OF TEN WESTERN STATES 

The study includes the leasing rate structures for 
grazing lands in the States of New Mexico, Arizona, Utah, 
Nevada, California, Oregon, Idaho, Montana, Wyoming, and 
Colorado. The purpose is to gain knowledge of the factors 
that influence the policies , practices , procedures and 
grazing rates in these States. 

Since the study is designed, in part, to develop 
bases for comparisons with the administrative procedures 
of the Bureau of Land Management, only those States which 
contain comparatively extensive State and BLM land areas 
were studied. Some 272,000 acres of public domain lands 
exist in the State of Washington under the jurisdiction 
of BLM but that acreage is not included in a grazing 
district. Furthermore, State and BLM lands in Washington 
do not appear to be comparative in nature, so no studies 
were made of State lands there. 

Within the ten States studied, a total of about 
37,000,000 acres are administered by the States for grazing 
use, compared to 175,397,000 acres of public lands devoted 
to that use. In each of these States the public domain 
acreage greatly exceeds that of the State. Only in New 



Mexico do the lands in the two statutes of ownership approach 
an even number of acres. In addition, the State lands in New 
Mexico are generally interspersed with those of the public 
domain, so it might be said that the most constructive com- 
parisons can be made in that State. The State administers 
about 10,626,000 acres under grazing leases in New Mexico and 
BLM about 14,428,000 acres. 

The variations in the procedures of the land administra- 
tive agencies of the western States appear to have been born 
of the concepts and traditions existing at the time the States 
entered the Union. These concepts and traditions in the use 
of public lands seem to have left their mark on the policies, 
procedures, and lease rate structures prevalent today. 

The general public economy in the Territorial days of 
these States, and during their early days of Statehood, was 
tied chiefly to the livestock industry. The only conceivable 
use of the great expanses of the public domain and selected 
State lands was for grazing. 

Vast selections have been made by the States to satisfy 
"floating" grants which were made by Congress in a specified 
number of acres, and also to make up losses to the State of 
fixed sections by prior entry, preemption, grants, withdrawals, 
reservations and other causes. Since the greatest value at the 



time of selection appeared to be in forage, and since any 
showing of mineral values, other than those showing upon 
the granted fixed sections, was a basis for withholding from 
selection, the selecting authorities of the States pounced 
upon lands that offered the best prospects for grazing and 
agricultural development. Thus, the lands remaining after 
State selections had been made offered the least surface 
product. Because of these prudent selections, State lands 
are generally sought more actively by livestock growers. 
Leasing has been preferred over deed by purchase because of 
comparatively lower costs. 

Occupancy has traditionally constituted a degree of 
recognized preemption. Whether it has been maintained by 
lease, permit, or other origin of tenancy, there is still a 
more or less recognized right born of prior use and occupancy, 

These theories of preemption are gradually giving away 
to a growing recognition of the principals of trusteeship. 
The lands granted to the States were designated to be held 
by the States in trust for certain named institutions, 
especially for the good of the common schools of the grantee 
States, and for other institutions. 

It is as trustees of the lands that the States are now 
giving attention to programs that will serve the highest good 
of the beneficiary institutions, and which will preserve the 



lands and their resources for the highest return in income. 

GRAZING FEES 
An examination of the procedures taken by the various 
land agencies of the States in evaluating the lands for 
grazing use shows many interrelated influencing factors . 

Carrying Capacity 

Chief among the yardsticks in common use by all the 
States is the element of carrying capacity. Nearly all other 
rate-making considerations stem from this single factor. At 
least one-half of the States studied determine this basic 
factor by a more or less scientific formula. 

The States of New Mexico, Arizona, Utah, Wyoming, and 
Montana make use of a more or less common formula in applying 
carrying capacity values to individual tracts, sections or 
consolidated areas. The forage acre factor of the land studied 
is determined by calculating the proportionate amount of area 
covered by totally palatable vegetation, as it bears to the 
entire area of the tract studied. This percentage figure is 
the forage acre factor. A forage acre requirement is deter- 
mined by recognized palatability and nutritional charts to 
indicate the amount of occurring forage needed for one cow for 
one year. From these values the number of cattle that can be 
supported year long on the studied area is determined. The 



figures can then be reduced to show the number of cattle 
one section will support for either one month or one season 
of several months . 

The formula is not peculiar to these several State 
agencies. It appears to be in use by other leasing agencies, 
both public and private, and is recognized extensively by the 
livestock industry. The variations in results in the use of 
the formula would result from varying estimates made by dif- 
ferent range examiners in determining the amount of forage on 
a studied tract and difference of opinion of experts as to the 
values of certain occurring forage types. The formula, never- 
theless, offers a solid criterion in the estimates of relative 
values in appraising grazing lands. 

The remaining States of this study who do not adhere 
closely to any set formula for judging carrying capacities, 
have what they believe to be sound methods which are the 
subject of no more controversy than when a written formula is 
used. 

In judging carrying capacities, the field agents of the 
Nevada Game and Fish Department prefer to scrutinize the 
number of animals of any type which may graze without damage. 
Where such data is lacking, this department seeks the estimates 
of other agencies or private owners with lands of similar 
characteristics, such as the Bureau of Land Management, to 



establish the grazing value of their lands. 

In the California Lands Department, whose lands are 
largely interspersed with those falling under the jurisdic- 
tion of the Bureau of Land Management, the values of the 
latter agency are used as a reference in giving carrying 
capacity amounts to the State lands, and leases are adjusted 
accordingly. 

The Idaho and Oregon land departments rely upon 
experienced and practical range examiners in obtaining in- 
formation with which to apply carrying capacity values to 
their lands. These examiners reject the use of definite 
formulae in their conclusions. They rely entirely upon 
their experienced judgment in determining the relative carry- 
ing capacities of their lands for rate-making purposes. 

The Colorado Board of Land Commissioners gives little 
weight to carrying capacity in fixing the rate of a grazing 
lease. It depends largely upon the negotiated conclusions of 
a willing seller and a willing buyer for a figure to affix as 
the rate for an individual lease. Under this system, carrying 
capacity estimates of the State's land examiners are matched 
with the leasing rate. 

Other factors appear in varying frequency in the rate- 
fixing processes of the State land agencies, but these are not 
generally prominent. 



Accessibility of the lands up for lease is a pronounced 
factor recognized in the States of Colorado, Wyoming, and 
Oregon. Accessibility here means distance from market and 
remoteness of ranch headquarters. It may also refer to 
topography . 

Statutory Minimums 
Statutory minimums, in the States where they exist, are 
solid factors which must be recognized, and serve as a basis 
for grading of lease rates. The Montana statutory formula 

directs that carrying capacities and beef prices, reviewed 
annually, shall determine the leasing rates when used in the 
relation which the statute provides. New Mexico law gives 
the minimum leasing rate for each numerical category of carrying 
capacity. The Commissioner may set rates only above that 
figure. Arizona law gives the minimum rate at which any tract 
of State land can be leased. Above that, carrying capacities 
related to certain beef price indexes determine rate. 

Rates above the minimums prescribed by statutes appear 
to be left to the discretion of the leasing agencies in all 
States except Arizona and Montana. There administrative dis- 
cretion applies only to establishment of carrying capacities. 
All other States would seem to vest a great deal of discretion 
in their land agencies to judge the proper rates for grazing 
leases. These rates, therefore, could be subject to the 
variations of opinion of the changing administrations. 



State agencies which reserve the right of annual review 
of the leasing rates are quite sensitive to the annual changes 
appearing in range conditions, and position themselves to 
adjust lease rates accordingly. Annual amount of precipita- 
tion also is a factor used by some agencies in the annual 
adjustment of lease rates. The amounts of precipitation are 
related to range conditions only as the time of precipitation 
is synchronized with growing seasons. The leasing agencies 
of the States of Idaho, Utah, and Nevada give lease rate value 
to the occurence of forage by seasons . 

Market Quotations 

Lease rates are tied directly to changing beef prices, 
by years, in the States of Arizona, Montana, and to a minor 
extent, Colorado. In the first two States, the recognized 
beef price index is that published by the Bureau of Agricul- 
tural Economics, U. S. Department of Agriculture as directed 
by statute. The Colorado Board of Land Commissioners gives 
consideration to the market quotations for beef at the time 
the lease rate is considered and established. 
Capitalized Value 

The States of Colorado, Wyoming, and Utah consider the 
capitalized value of the lands in judging a justifiable 
leasing rate. Both Wyoming and Utah have projected a long- 
range program where the leasing rate will represent a 



percentage rate of return on the capitalized value of the 
land. The return at present is at a low rate, percentage- 
wise, but years of adjustment are expected to bring about 
a recognizable relationship. The capitalized value of the 
land becomes important in setting a rate for leasing in 
Colorado, only when sale of the land is being considered, 
and the current lessee is the highest bidder in a sale. 
In such case, he is given the option of consummating the sale 
or retaining a lease on the premises at a lease rate equal 
to 4 percent of his bid price for the lands . This policy 
was innovated in 1961. 

The sale of ranch properties in which the sale price 
is on a consideration of value for each animal unit the 
ranch will support is closely observed by the leasing 
agencies of Wyoming and Utah. Such animal unit values are 
deemed to have a bearing upon the value of the land being 
conveyed. These values are applied to the State's lands 
which are similar to those being transferred by sale, whether 
they be within that ranch boundary or adjoining. The values 
found by this method are important in fixing proper leasing 
rates . 

In the States where animal unit values were the considera- 
tion in ranch sales, these values were reported as varying from 
$350 per cow unit to somewhere around $600. This depends, of 



course, upon the condition of the ranch, the adequacy of 
improvements, probable operational costs, and so forth. 
This factor in considering lease rate values appears to be 
pertinent and important. It perhaps could be more exten- 
sively developed by most of the States. (The survey along 
this line was by no means complete in connection with this 
study and scattered reports are far less than conclusive.) 

An interesting study of ranch values in relation 
to the value of animal product has been completed by the 
Wyoming Agricultural Experiment Station, University of 
Wyoming, Laramie. The results of that study are published 
as a progress report in Mimeo Circular No. 154, issued in 
June, 1961. The study is of 35 selected ranches in Wyoming 
and includes 9 small ranches of 250 cow units or fewer, 16 
"medium sized" ranches of from 250 to 525 cow units, and 10 
"large" ranches of 525 or more cow units, including one 
ranch rated at 1,529. 

The investment and operational costs for the year 
1959 were studied from carefully recorded investment and 
costs figures kept by the operators. The ranches studied in- 
cluded all conceivable types of operation and classes of range 
cattle with the various combinations of age and sex. Net 
sales were averaged to show profit or loss in comparison with 
return to investment and operating costs. Curiously enough, 



10 



lease costs were among the lower category of items used In 
finding costs of operation, and compared closely to tax 
expenses. The average lease cost varied by categories of 
ranch size, from $3.28 to $4.52 per cow unit on the ranch, 
and tax costs varied by ranch size from $3.62 to $4.31 per 
cow unit. 

Only one State agency, the Nevada Game and Fish Depart- 
ment, appears to give any consideration to private leasing 
as a source from which might be derived acceptable leasing 
figures. The rate set by that agency of $1.50 per animal 
unit month is said to be inspired by the prevalent private 
lease rates . 

Competition 

The element of competition is kept alive in the leasing 
programs of at least three States -- Colorado, Idaho and 
Nevada — and exists to some extent in others. In Colorado 
the description of expiring leases is posted for public 
inspection in the counties in which the leased land lie, and 
bids for the renewal of the leases are taken. The current 
lease holder can preserve his preferential right to renewal, 
provided only that he does not sub-lease the subject lands, 
and may exercise this preferential right to renewal by meet- 
ing the highest bid offered for the lease. Conflict bids of 



11 



this nature are not unusual in the State of Idaho, on the 
imminent expiration of leases . Where such bids are 
received, just before the expiration of a lease, the lease 
is advertised and is awarded to the highest bidder, with- 
out preference to the current lessee. All leases issued 
by the Nevada Game and Fish Department are first subject 
to public bidding, and award is made to the highest bidder 
without regard to prior occupancy. New Mexico law, also, 
provides that any person, within certain limits of time, may 
bid on an expiring lease, but only on the lease as a whole. 
The prior lessee has preferential right to meet the highest 
bid offered, and retain the lease. Such bids in New Mexico 
are rare, only 18 having been recorded within the past eight 
years . 

Rate offers by lease applicants constitute a minor but 
perceptible influence in lease rates, particularly on open, 
or unleased lands . These offers are found influential in 
the States of Colorado, California, Nevada, and New Mexico. 
However, since nearly all of the grazing lands of these States 
are usually under lease, the offers are rare and occur chiefly 
when unencumbered lands have to come to the State through a 
governmental exchange . 

The rates charged for lands under the jurisdiction of 
the Bureau of Land Management and the Forest Service are 



12 



sometimes influential in the setting of the State'6 rates , 
particularly in California and Utah, where the lands of 
those States are interspersed with those of the govern- 
mental agencies. In such case the lease rate on the 
predominant land status pattern is accepted and used by the 
State agencies. 

A criterion of lease values is sometimes established 
by the land agencies of Colorado, Idaho, and Oregon by 
applying a minimum rate to the poorest land, and the superior 
qualities of the better land are rated in relation to those 
of the poorest lands. 

Availability and accessibility of stock water are given 
consideration by the land authorities in Wyoming and Oregon 
in judging the lease value of land. This item perhaps is 
given consideration by the range examiners of other States, 
also, in making their rate recommendations to the higher 
authorities, but are not otherwise expressed by the agencies 
interviewed. 

The demands for revenues by the States, particularly the 
demands for common school funds, would appear to bring some 
pressure to bear in the adjustment of grazing rates, and can 
be considered currently an influence in Oregon and New Mexico, 
The Montana legislature provided that for the 1960 leasing 
year an arbitrary premium of 10 cents per animal unit month 



13 



would be charged, out of consideration of the State's need 
of revenue. School revenue needs were used as a basic 
argument for raising the grazing lease rates by the 1961 
New Mexico Legislature. The public school demands could 
very possibly bring pressures to bear throughout the western 
States for higher leasing rates in the near future, judging 
by the continuing enrollment increases which are now the 
general rule. 

The competitive lease market has already been dealt with 
here, insofar as competitive bidding for leases is concerned. 
However, the known market demand for leases in Colorado and 
Oregon appears to be further exploited by the leasing agencies 
of those States. With the full knowledge by both negotiating 
parties, representatives of the State and the applying party, 
that the lease will "not go begging," the Colorado Board of 
Land Commissioners asks and receives a higher leasing rate on 
the average than any of the other public land States. The 
Oregon rate does not indicate the fullest exploitation of this 
principal. Other States are less inclined to "play one 
applicant against the other," so to speak. 
Public Opinion 

Public opinion appears to be coming to the front as an 
influential force in the lease-making structures of the western 
States. During the past few years more and more comment has 



14 



been appearing in the public press concerning the policies 
and rates set by land leasing agencies. Public opinion, as 
a result of these press comments, seems to be aroused to a 
greater extent at present than ever before. Leasing policies 
have been recently examined and debated by an interim com- 
mittee of the legislature in Colorado. Controversial issues 
have been raised in the public press recently in New Mexico. 
Legislative consideration has been given to land policies in 
most States in recent years, and this legislative activity 
in this field might be directly ascribed to new public concerns. 
The effect has been, in States where such conditions have oc- 
curred, an upward trend of leasing rates. 

On the other hand, resistance, as could be expected, has 
been offered by the livestock industry and its organizations, 
to meet the hostile views that might arise out of public or 
press discussions of land matters. The livestock industry 
indicates apprehension of new laws or rules that would (1) raise 
leasing rates to the extent of jeopardizing sometimes marginal 
operations; (2) encroach upon their sovereignty over their 
holdings and operations; and (3) which would lead to their 
dispossession of leased lands and the breaking up of established 
ranch units by sales in which they would be forced to pay un- 
realistic, exorbitant or highly speculative prices in order to 
hold their ranch units intact. There are usually competent 



15 



spokesmen for the livestock industry who, to some extent, are 
able to convince administrative and legislative bodies of the 
hazards of ranching and the unstabilizing effects of some 
actions these bodies might take. 

Laws and rules under which most of the State land agencies 
operate give much consideration to the economic desirability 
of consolidated ranch units, and to the end that these might 
be preserved, allow for the preferential leasing to owners 
and occupants of contiguous lands. The ranch unit is generally 
further preserved through the preferences given to the lessee 
on renewal of his lease . Some also give the occupying lessee 
some preferential treatment when lands are sold at public 
auction. 

These concessions to lessees are believed to be not with- 
out some advantages to the States. Most States find it to 
their advantage to provide the lessee with ample incentive to 
protect and preserve the land for the future, where such 
preservation, protection and any range improvements would insure 
to the lessee's benefit. 

Terms of Leases 

Grazing leases are usually fixed for terms that will 
assure the lessee peaceble possession for a number of years 
that will make possible adequate planning. Only in Oregon and 
Wyoming are terms fixed entirely administratively. The other 



10 



eight States studied find maximum terms for leasing in 
statutory provisions. The longest term allowed by law in 
any State is the maximum Utah term of 18 years. However, 
where allowed to do so by law, most States set the term at 
ten years. New Mexico and Nevada law limits the grazing 
lease to five years. The California Lands Commission, not- 
withstanding the law allowing leases for up to ten years, 
authorizes no lease for a term exceeding five years . 

The lessees of New Mexico, Nevada, and California find 
a greater degree of security under the terms of their five- 
year leases, however, than they would under the ten-year 
leases of other States for the fact that fees are not raised 
during these five-year terms. 

Another security given the lessees of New Mexico, Arizona, 
and Nevada is that these States do not reserve the right to 
withdraw the lands for sale during the period named in the 
lease. Likewise, Wyoming allows no sale except in the final 
year of the lease, by policy, but reserves the right to make 
such withdrawal in the discretion of the Board. 
LEASE RESERVATIONS 

Included among the reservations which are entirely in 
common among the lease stipulations of the ten western States 
of this study are the State's right to grant entry for mineral 
development; to issue rights-of-way for any and all purposes 



17 



seen fit by, and in the discretion of, the granting authori- 
ties ; and the right of entry for the removal of any of the 
natural products of the demised premises. Most States, in 
fact, reserve all rights not expressed in the grazing lease 
and specify the leases for grazing purposes only. 

Two States, Utah and Nevada, reserve the right to specify 
the seasons for grazing use and the extent to which the lands 
shall be used during those seasons, as well as to designate 
the type of animals which shall be placed upon the lands, 
whether cows, horses, sheep, or goats. 

Two States, Utah and Colorado, reserve the right to with- 
draw any part of the land described in the lease, at any time, 
for the purpose of re-classification and disposition through 
lease for purposes other than grazing, as well as for sale. 

Reservations by the States for public access for fishing, 
hunting, and other recreational uses are varied and handled 
in singular ways. 

The New Mexico grazing lease makes no reservation for 
public entry for the recreational pursuits. State law would 
appear to leave the matter to the discretion and wishes of 
the lessee, for the law allows him to post his private and 
leased lands "for the purpose of protecting and propagating 
the game birds, animals and fish" within certain described 
enclosures, after giving prescribed public notice of such 



18 



posting. This sovereignty of the lessee over State lands 
would appear to be strengthened by the statutory admonition 
that the lessee shall be responsible to the commissioner 
for any trespass or damage to the lands while he holds them 
under lease. He thus takes on custodial duties co-extensive 
with his privileges as a lessee, and would appear to have 
authority over the entry of other parties who do not have 
license of entry issued by the State. 

Efforts of New Mexico groups to bring about the repeal 
or revision of the posting law to eliminate State lands from 
posting privileges have historically failed in the legis- 
lature . 

Hunting and Fishing 

A new approach to meet the pressures of the sportsmen 
seeking entry to State lands for hunting and fishing was 
taken early in 1961, when the State Department of Game and 
Fish applied for, and received, from the New Mexico Commis- 
sioner of Public Lands, a blanket easement. It opens all 
State lands held under the jurisdiction of the Commissioner, 
other than mineral acres , for entry for the purpose of carry- 
ing on game management operations, to include hunting and 
fishing by individual licensees. Since in the grazing lease, 
the Commissioner expressly reserves that right to issue right- 
of-way easements for any purpose he may deem to be justified, 
this easement issued to another State agency may transcend 

19 



the privileges conveyed to the lessee by law. 

The land department in the State of Arizona does not 
retain jurisdiction over the use of State lands for hunting 
and fishing. These lands may be posted by the lessees, but 
only with the permission of the State Department of Game and 
Fish. In the absence of any such authorized posting, the 
lands are, of course, open to the public. 

Utah law provides that all State lands shall be open to 
use by the public for hunting and fishing. All other 
recreational uses on the lands are held to be leasable and 
are so handled by the land department there . 

The only State agency in Nevada which offers any exten- 
sive amount of land for grazing is the State Fish and Game 
Department, whose 277,000 acres were primarily acquired for 
the habitat of game birds and animals. This department, 
therefore, retains exclusive jurisdiction over their lands 
as to hunting and fishing privileges . 

In California, public access for fishing on State lands 
is expressly reserved by the terms of the State's constitu- 
tion. However, the land department conveys to the grazing 
lessee by unstipulated acquiesence all control over public 
access for hunting of game birds and animals . It would 
reserve jurisdiction over these privileges only in the event 
of a program whereby the State would be compensated for the 



20 



entry of hunters, the theory being that the lands held in 
trust must yield a return for each value in use. There is 
no such program at this time. 

The Oregon grazing lease reserves to the public any and 
all recreational privileges on State lands so long as that 
use does not result in damage to the lands. The discretion 
does not lie with the grazing lessee, but with the land 
agency . 

The Idaho and Wyoming grazing leases, likewise, reserve 
to the public the right of entry for hunting and fishing. 

The Montana grazing lessee is allowed to post the leased 
premises against hunting and fishing and to control entry, 
only if there is no written agreement between the land depart- 
ment and the Game Department providing that only certain tracts 
shall be open to public use. 

The Colorado Board of Land Commissioners allows complete 
sovereignty to the lessee in the matter of entry to the lands, 
aside from expressed reservations in the lease. 
SUPERVISION OF RANGE PRACTICES 

Supervision of range management and policing of range 
practices are conspicuously lacking In the land agency adminis- 
trations of the States studied. 

There could be a number of reasons for what appears to be 
a laissez faire attitude of these agencies in this respect. 



21 



Limited budgets of these departments for the employment of 
competent supervisory staffs could be one of the basic causes. 
The lack of consolidated land patterns and attendant difficul- 
ties of inspection could be another reason. But the reason 
which is most widely expressed is the confidence in the 
prudence and skill of the livestock growers to judge for them- 
selves, as experts in their vocations, the best practices under 
which to utilize and preserve the range. The State agencies 
are inclined to preserve lease tenure in order that the lessor 
may be assured that the range benefits he brings about will 
accrue to his own advantage . The other device that the agencies 
use to insure the security of the lessee and thus add to his 
incentive to better range management is the preservation of 
ranches as units . This is done through the lease device of 
preferential rights of renewal in most of the States, plus the 
advantages that are preserved to the lessee in the event the 
land is placed on the market. One device is offering to the 
occupying lessee the right to meet the highest bid in a sale. 
Another means is through the value of improvements , which a 
competing bidder is obliged to purchase in order to qualify 
as a bidder. The advantage to the occupying lessee is that 
he does not have to post cash for the improvements he already 



22 



Another device used by some States to lend incentive 
to the grazing lessee to engage in the best range practices 
is to sustain as improvements any work done at his expense 
in the matter of reseeding of range, soil and moisture con- 
servation measures, such as water retention dams, stock tanks, 
spreader dams, and brush or weed eradication. In order that 
the user may pay gradually the costs of these improvements, 
leases may be extended, as in Utah, where the lease term may 
be lengthened up to 18 years. In all but one or two States, 
the value of these improvements would be appraised for their 
value to the land. In the case of a change in occupancy, the 
new occupant would have to pay the former occupant accordingly . 
Supervision is generally given by the State land agencies to 
the extent that approval would have to be gained before such 
improvements were begun. 

Lease Supervision 

The element of lease supervision is not entirely lacking 
in any of the States. All States have active range examiners 
or "field men" who familiarize themselves with conditions 
that affect State lands. Spot checks are relied upon to ap- 
prehend and correct any range abuses. The field men are in 
most cases respected range specialists who work with livestock 
operators and persuade them to follow practices that best serve 
the land they use. 



23 



The greatest degree of State supervision of range 
practices is offered by the land department of Utah. Here 
the State's range examiners judge the land for seasonal use 
and supervise control over the type of animal to be grazed 
on the State's tracts and the seasons during which grazing 
shall be allowed. They offer advice in the control of 
noxious weeds and poisonous plants. 

In Idaho, the State, through its land department, 
administers programs to wipe out undesirable plants with the 
use of State-appropriated funds. 

In most States there is a noticeable reliance upon the 
Bureau of Land Management to supervise and police range 
practices. The same reliance is placed upon the Forest 
Service of the United States Department of Agriculture where 
State lands are interspersed with the lands under the control 
of that agency. This reliance would appear to be expedient, 
because the States in such case would be unable to enforce 
independent programs of range management . 

GRAZING LESSEE RESPONSIBILITIES 

State land agencies vary somewhat in the degree of 
custodial responsibilities that are placed upon the grazing 
lessee. 

The strongest responsibilities along this line are placed 
upon lessees in New Mexico, Arizona, and Montana. In New Mexico 



24 



the Commissioner of Public Lands has charged the amount of 
damages suffered to the land by trespass, such as timber 
theft. The same covenants exist in the Arizona grazing 
lease, but no one recalls recovery from any lessee for 
damage done by another. 

In Utah the grazing lessee is responsible for trespass 
damage only if he does not report it to the leasing agency. 
Under the Montana lease terms a lessee could logically suffer 
the penalty of loss of his lease if he allows an unauthorized 
or unlawful use of the lands he holds under lease. In other 
States there appears to be no degree of custodial responsi- 
bilities placed upon the lessee, other than for his own actions 
and practices. 

The matter of providing access to State lands appears to 
have been undertaken in no more than three States of the ten 
studied. However, it would appear that each one of the State 
land agencies has some degree of control in this matter, if 
by no other device than to withhold leases from any land owner 
who unreasonably obstructs access for authorized uses of State 
lands. It is doubtful that any States that have not covenated 
such access in their leases would be in a position to cancel 
the lease of anyone who so obstructs access to State lands. 

Not long ago, the New Mexico Land Commissioner inter- 
vened in a court case in which a mineral lessee sought entry 
to the same section held by a grazing lessee who denied him 



25 



access across private lands to reach the State section. In 
this case, a District judge ruled that the mineral lessee 
rightfully had a "way of necessity" to the State land. The 
grazing lessee was obliged under the court order to allow 
the mineral lessee a route across the private lands. 

Under a 1957 California law, the lands department there 
has announced plans to declare access to all State lands. 

Only the Montana grazing lease contains a covenant that 
the lessee shall provide reasonable public access over his 
private lands to the State lands he holds under lease. 
IMPROVEMENT ALLOWANCES 

Eight States of the ten studied make similar provisions 
whereby grazing lessees may place improvements on the lands. 
Some land agencies are more sparing than others with the amount 
of improvements allowed. Most of these eight States exercise 
some degree of vigilance to prevent excessive improvements, or 
improvements which would not enhance the usefulness, and, there- 
fore, the value of the land. In a succession of lessees the 
owner must be compensated for the true value of the improvements 
placed by him. Excessive or undesirable improvement costs would 
inhibit the bidding for leases, or, in case of a sale, would 
hamper the competitive bidding. 

Among the eight State leasing agencies allowing some freedom 
for the placement of improvements, the general practice is that 
all improvements of any kind, or in excess of a certain fixed 



26 



limitation of value, must be approved by the land leasing 
authorities before being placed. They are otherwise presumed 
to be placed in trespass, and therefore, in some cases, might 
become the property of the State. All States allow the owner 
to remove any improvements he is able to remove without damage 
to the land, in the case of a change in occupancy. Otherwise, 
a system of appraisal is provided, and the owner of the improve- 
ments is compensated for their value at the rate of appraisal 
of the land agency appraisers. Various courses of appeal are 
provided, a common one being to the local courts. In some 
cases, the land commissioner's appraisal is final. 

States that allow improvements only at the owner's risk, 
and who do not require the lessee's successor to pay for the 
improvements are Nevada and Oregon. 

RECENT HISTORY OF STATE LAND SALES 

The sale of grazing lands by the land agencies of the 
western States during the past few years has been quite sparing 
with the exception of the New Mexico sales. Either the policies 
of the other States or the situation of land patterns has 
apparently discouraged such sales. Actions of the early-day 
selection committee in New Mexico, coupled with the policy of 
land blocking pursued by the New Mexico Land Commissioners in 
the process of some vast land exchanges with the Federal govern- 
ment in later years, have resulted in generally consolidated 
State land patterns. Many of the large ranch holdings comprise 

27 



chiefly lands which are or have been State owned. In order 
to bring these ranches under a greater percentage of fee 
ownership of the surface estate, lessees have been active in 
applying for the purchase of State lands. Since there has 
never been any law or set policy limiting the extent of sale 
to any individual in New Mexico, some of the sales have 
amounted to many thousands of acres . Limitation of acreage to 
any one individual applying for purchase of State lands is a 
common practice in the other States—by policy, if not by law. 

Examining the other States individually for the extent of 
grazing land sales in recent years, it is found that the few 
thousand acres sold each year have brought prices that fail to 
be indicative of the probable average grazing land values. 
The sales of most of the States appear to be confined to highly 
marketable small tracts which might logically be converted from 
grazing use to home site or agricultural development. 

In Arizona, the sale of grazing land as such is discouraged 
by the Board and the Commissioner. To establish a sufficient 
obstacle to implement this policy, the board of appeals there has 
set an arbitrary minimum value on all State lands at $25 per acre, 
regardless of their character. The lands selected for sale for 
the four -year period prior to 1961 brought an average selling 
price at public auction of $294 per acre, indicating agricul- 
tural or commercial development. The 4,318.81 acres sold by the 



28 



Arizona Land Commissioner during the year ending June 30, 
1959, brought an average of $314.93 per acre. The State of 
Arizona has sold 906,129 acres of land since Statehood, but 
statistics of per-acre values back through the years are not 
readily available. 

Very few sales of grazing lands have been allowed in 
Utah during recent years . The limited acreage that has been 
sold shows a sale price of from $2.50 to $25 per acre. Such 
sales were allowed only to give the applicant an opportunity 
to block in State lands with his other controlled lands, in a 
few isolated cases. At the present time, the State Land Board 
of Utah is disinclined to sell any grazing lands, except where 
commercial, agricultural or recreational potentialities are 
seen. 

The grazing lands held by the State of Nevada, as stated 
elsewhere in this report, were acquired primarily for game 
habitat, and would only be sold if found to be in surplus. 

State land sales in California have been suspended since 
early in 1960, and generally only those lands that are sub- 
marginal for grazing use have been selected for selling. 
Recent statistics show that such lands, in a limited number of 
sales, have brought from $20 to $50 per acre. 

The sale of State lands in Oregon is neither promoted nor 
encouraged by the land agency. Such sales as have been held 



29 



in the past ten years, on a very limited basis, have brought 
per-acre prices as low as $2.50. The present-day grazing 
land values are believed by land authorities to be in the 
neighborhood of $6 to $7 per acre, based upon prevailing 
values in eastern Oregon. 

The land agency of Idaho is prohibited by law from sell- 
ing any State land at less than $10 per acre and is permitted 
to sell no lands at all with any degree of timber cover. How- 
ever, there is reported to be an active market for State land 
there, and high values were realized in the limited number of 
sales that have been recently approved. The demand is for 
land that can be converted to grain culture, but because of 
the limited acreage allotments that are available under Federal 
programs, the land agency is reluctant to allow any extensive 
sales of land that could be converted to agriculture. Ranchers 
apparently find ample satisfaction in leasing the State lands 
and their applications for the purchase of lands to be retained 
for grazing are rare. Only potentialities for other development 
bring high prices. In 1960, the land board sold 6,000 acres in 
southern Idaho at an average of $125 per acre. 

State land sales in Montana are held with consistent 
frequency, and represent all types of land held by the State, 
but transactions are usually limited to a section or less. In 
the fiscal year 1958-59, 10,492 acres were sold at an average 



30 



of $47 per acre, and during the 1959-60 fiscal year, 40,316 
acres were sold at an average of $21.25 per acre. 

The few sales in Wyoming in 1960 brought an average per- 
acre price of $12.50 per acre. 

In Colorado, sales are at a sufficient rate of frequency 
to test values from time to time in the various categories of 
land classification. In 1945, the records show that 25,095 
acres of grazing land were sold at an average price of $7.95 
per acre; the 1950 sales of 15,820 acres of grazing land brought 
an average of $15.10 per acre; in 1955, 8,530.94 acres were sold 
at an average of $19.12; in 1960, 3,431.88 acres of grazing land 
brought an average price of $33.05 per acre. The Board of Land 
Commissioners there believes that higher prices were prompted 
by the desirability of acquiring isolated sections of State 
land for blocking with the buyers ' fee areas , and higher prices 
were paid for the sake of preserving an economic pattern for a 
ranch unit. Most of the lands sold were competitive by reason 
of their location. 

NEW MEXICO SALES 

The sales statistics of New Mexico for the past eight and 
one-half years are revealing and interesting from the stand- 
point of the amount of acreage sold, the great amount of grazing 
lands passing into private ownership, and also from the stand- 
point of the amount of revenue realized by the State from the 



31 



conversion of State lands from grazing to other use and improve- 
ment. 

The total amount of New Mexico State acreage sold for the 
years 1953 through mid-1961, was 340,434.97, at a total selling 
price of $10,855,749.24, or an average of $31.89 per acre. There 
were 473 separate sales held during this period, and all, by law, 
were at public auction after advertising. 

Out of this eight and one-half-year period, it is possible 
to determine from the records the acreage appraised and sold as 
grazing land for the period 1957 forward to the present. During 
this four and one-half-year period, 279,021.03 acres of land 
classified for grazing were sold. The acreage was situated in 
thirty -one of the thirty-two counties of the State (there are 
no State lands in Los Alamos County) . These lands were sold in 
208 separate tracts for which the total Land Office appraisal 
was $2,543,820.73, or at the average rate of $9.53 per acre. 
Under the public auction procedure, competition brought the 
average per-acre selling price to $11.78, for a total return 
to the State of $3,127,428.57. 

The average appraised values of grazing land for the period 
1957 forward to the present, follow a pattern of small fluctua- 
tions. No grazing lands for the period were appraised at less 
than $5 per acre, although there were a great many appraisals 
at that figure, where terrain and palatable vegetative cover 



32 



did not justify a higher estimate of value. 

The average per-acre appraisal for the year 1957 of 
grazing lands offered for sale was at the rate of $9.44, 
as against an average selling price of $12.16. Correspond- 
ing figures for the years following were as follows: 1958, 
average appraisal, $10.67 and average selling price, $12.50; 
1959, average appraisal, $9.70 and average selling price, 
$12.96; 1960, average appraisal, $8.73 and average selling 
price, $11.05; for the first six months of 1961, average 
appraisal, $9.12, and average selling price, $10.24. 

In the four and one-half year period from January 1, 
1957, through July 1, 1961, competitive bidding occurred 
in 152 of the 363 sales held, representing all types of land 
offered. The element of competition, therefore, entered 42 
percent of all sales. 

Taking the sales of grazing lands alone for the four 
and one-half year period, competitive bidding occurred in 
44.4 percent of the sales or in 52 out of 117 such sales held, 

In order to determine the effect of lessee improvements 
as a deterrent to competitive bidding, statistics were taken 
on improvement values for the grazing land sales held during 
the period of December 1, 1960 to July 1, 1961, for which 
period these statistics were the most readily available. 
During this period, 125,407.79 acres of grazing lands were 



33 



advertised and sold, in 71 separate sales, on which the improve- 
ments were valued at $519,477, according to the Land Office 
appraisers, or at an average per-acre value of $4.14. The land 
was appraised at $1,073,756.29, or at an average or $8.56 per 
acre. The selling price was for a total of $1,214,945.47, or 
at the rate of $9.69 per acre. 

Competitive bidding occurred in only 11 of the 71 sales. 
However, improvement values were listed in eight of the 11 
sales in which competitive bidding occurred. The improvement 
values in these contested sales averaged less than $1.00 per 
acre, whereas the improvement values on all of the 71 grazing 
land sales of that period averaged at the rate of $4.14 per 
acre. 

It must be observed here that improvement values were 
not likely to be the only deterrent factor to competitive 
bidding, if it was a factor at all. The range code, in which 
ranchers notably decline from interfering with a neighbor's 
land pattern could be a strong deterrent to competitive bidding, 
Furthermore, lands offered for sale are frequently so situated 
as to be isolated from free access to any other than the lessee 
who has managed through leasing to block the various tracts up 
within his pastures, and would be, therefore, more useful to 
him than to any other ranch operator. 



34 



Improvement values apparently work to the detriment of 
competitive bidding where they represent large sums of cash 
which a bidder, other than the owner of the improvements, 
must post in order to participate in the bidding. Inconven- 
iences in furnishing such cash amounts , plus the fact that 
the improvements may not be to the taste of any other ranch 
operator or perspective buyer may serve to thwart competition 
in the purchase of State grazing lands. 

A contrasting fiscal picture lies in the usual State 
purchase contract in which any buyer, if the successful 
bidder, may pay for the land over long terms, whereas if he 
is not the owner of the improvements, he is required to settle 
for them in cash. None of the States studied provide any 
financing of improvement values . The New Mexico sales con- 
tract or certificate of purchase, as it is called in some of 
the States , provides for a small down payment in land purchases 
of only 5 percent of the principal amount with interest on 
deferred payments at the rate of 4 percent per year. Payments 
on the principal are at the election of the buyer over a 
thirty year period, and must be paid only at the end of that 
time . 

The reclassification of lands from grazing to commercial 
uses has been profitable in several of the States within the 
past few years, particularly in the States of Arizona, New Mexico, 



35 



and Colorado. This reclassification has usually occurred 
where the lands lay adjacent to developed areas and were 
converted from grazing use to home site or commercial 
development for business and industry. 

New Mexico Land Office statistics show the conversion of 
7,856.68 acres of such land from January 1957 to July 1, 1961. 
This land was aold in 117 separate transactions, and spirited 
bidding occurred in most of these sales. The gross selling 
price of land in this category was $5,426,157.86 against a 
Land Office total appraisal of $2,065,174.47. The greater 
part of the sales were of tracts near the expanding city of 
Albuquerque. These sales reached their peak in 1958, with 44 
such sales offered during that year. The average per-acre 
selling price that year was $1,333.17. However, fewer sales 
(22) in 1959 showed a higher per-acre return to the State of 
$1,358.70. Improvements were not considerable in any of the 
sales, and offered, in most cases, development planning to 
the buyers' own tastes and prudence. 

As of July, 1961 the New Mexico State Land Office was 
advertising 60 tracts of land for sale within the following 
three months . The total acreage embraced in the sales adver- 
tised was 70,508. Of these tracts all but seven were classi- 
fied and appraised as grazing lands. The total acreage of 
this class was 70,140.75. The majority of the acreage being 



36 



advertised for sale was being placed on the market on the 
application of the grazing lessees. However, 21 of the 
grazing tracts were being advertised on the application of 
a single land company, whose applications were causing a 
great deal of consternation in the livestock industry. The 
larger tracts applied for included, in the separate applica- 
tions of that company, were from 1,280 to 9,676 acres. Others 
of the 21 tracts being advertised as a result of applications 
of that company were of one section or less. 

The grazing acreage being advertised as of July 1 was 
situated in 17 of the 32 counties of the State, and carried 
an average appraisal value of $9.59 per acre, which was within 
three cents of the average per-acre appraisal of all grazing 
lands sold in the previous four and one-half year period. The 
improvement values totaled $346,625.99 on the 70,140.75 acres 
of grazing lands being advertised, or an average of $4.94 per 
acre. This improvement value per acre compares to the $4.14 
in improvements per acre for the grazing lands sold during the 
seven months just previous to July 1, 1961. 



37 



APPROXIMATE NUMBER OF ACRES UNDER LEASE BY STATES, COMPARED TO 
CORRESPONDING NUMBER OF ACRES UNDER BLM LEASE OR ALLOTMENT 
(AS OF I960) 





State Leases 


BLM Leases, Allotments, Leases 


State 


Acres 


Acres 


New Mexico 


19, 626, 000 


14,428,000 


Arizona 


8,653,000 


14,769,000 


Utah 


3,250,000 


25,544,000 


Nevada 


277,000 


50,532,000 


California 


600,000 


8,562,000 


Oregon 


696,000 


13,310,000 


Idaho 


2,190,000 


12,763,000 


Montana 


4,213,000 


8,934,000 


Wyoming 


3,595,000 


17,939,000 


Colorado 


2,850,000 


8,616,000 



36,950,000 



175,397,000 



GRAZING LEASE TERMS BY STATES 



STATE 


USUAL PRACTICE 


LIMITATION 








BY LAW 


New Mexcio 


5 


years 


5 years 


Arizona 


10 


years 


10 years 


Utah 


10 


years 


18 years 


Nevada 


5 


years 


5 years 


California 


5 


years 


10 years 


Oregon 


10 


years 


None 


Idaho 


10 


years 


10 years 


Montana 


10 


years 


10 years 


Wyoming 


10 


years 


None 


Colorado 


2,4,6,8, 10, yrs. 


10 years 



GRAZING FEES BY STATES -- RANGE AND AVERAGE RATES 



State 


Average 

Per 
Acre Fee 


Range in 
rates per acre 


Rate per 

AUM 


New Mexico 


110 


30-2J+0 




Arizona 


70 


2$-nt 




Utah 


4.20 


2^-0-280 




Nevada 






$1.50 (ave.) 


California 


30 


Info, not available 


190** 


Oregon 


io|0 


80-280 




Idaho 


10^ 


40-200 




Montana 


18J0 


Info, not available 


i+S0 


Wyoming 


12|0 


50-280 




Colorado 


300 


80-500 





* Average value of land in Utah is estimated by State Land Office 
officials at $10.00 per acre. Since the State looks for a return 
of 1$ per year on the capitalized value of the land, this figure 
should be 100; however, total annual income, divided by the total 
number of acres under grazing lease indicates a per-acre yield of 
k,2 cents. 



** Leases are valued on a case basis, and rates of fees are strongly 
influenced by prevailing BLM rates for the area and period. 



STATE POLICIES IN LAND SALES 



State 


Lands Withheld 
from Market 


Sales Discouraged or 
Allowed sparingly 


As Market 
Demands 


Legal Acreage Limit- 
ation to Ruyers 


New Mexico 






X 


None 


Arizona 




X 




1 Section 


Utah 






X 


k Sections 


Nevada 








None 


California 


X 






None 


Oregon 




X 




None 


Idaho 




X 




320 Acres 


Montana 




X 




None 


Wyoming 




X 




None 


Colorado 




X 




None 



CONTROL OF NOXIOUS WEEDS, POISONOUS PLANTS ON STATE LANDS 



State 


Up to 
Lessee 


Required 
of Lessee 


Improvement Credit 
if done by Lrrrpp 


Lease Adjustment to 


State Offers 

r"-introl Advice 


New Mexico 


X 




X 






Arizona 


X 




X 






Utah 


X 






X 


X 


Nevada 


X 










California 


X 










Oregon 


X 










Idaho 




X 


X 




X 


Montana 




X 






X 


Wyoming 




X 






X 


Colorado 


X 






X 





PREDATOR, RODENT CONTROL --BY STATES 



State 


Lessee Must 
Qontrol Rodents 


State Relies on 
N.F. & W.L. and 


Licensed Taking 
As Fur Bearing 


Coyotes Protected 
for Rodent Control 


New Mexico 




X 






Arizona 




X 






Utah 




X, 






Nevada 




X 






California 




X 






Oregon 




X 






Idaho 




X 






Montana 


X 


X 






Wyoming 
Colorado 


X 


X 


X 


X* 



* In one district of Colorado 



USUAL RESERVATIONS IN GRAZING LEASES 



BY STATES 



State 


Entry for 

Mineral 

Development 


Rights- 
of-way 
All 
Purposes 


Removal 

of 
Natural 
Products 


Annual 
Adjust- 
ment or 

rate 


Any Use 
Not Con- 
veyed in 
Lease 


Right 

to 
Sell 


Right 
to de- 
clare 
seasons 

n f U5 o 


Right 
to des- 
ignate 
animal 

t.ypps 


To withdraw 
for re- 
classifica- 
tion 


N.Mex 


X 


X 


X 














Ariz. 


X 


X 


X 


X 












Utah 


X 


X 


X 


X 




X 


X 


X 


X 


Nevad, 


X 


X 


X 




X 




X 


X 




Calif. 


X 


X 


X 






X 








Oregor 


X 


X 


X 


X 


X 


X 








Idaho 


X 


X 


X 


X 


X 


X 








Mont* 


X 


X 


X 


X 


X 


X 








Wyo. 


X 


X 


X 


X 


X 


X* 








Colo. 


x 


X 


X 


X** 




X 






X 



* Wyoming reserves the right to sell the land at any time more than one year 
after the date of issuance, but by policy does not place the land for sale 
except in the first year of the lease. 



This reservation only on leases issued for 8 to 10 years and then only at 
half-way period of the lease. 



FACTORS INFLUENCING THE RATES FOR THE FIXING OF GRAZING FEES BY STATES 





o 
o 

o 

p 
& 


f 

9. 

a 


c+ 

B 

p 


M 

o 


2 


o 


P 


P 

P 


c+ 


> 

-i 

SI 


ID 

< 

a 

n 



Accessibility of Lands 


X 


X 






X 












Carrying Capacities 


X* 


X 


X 


X 


X 


X 


X 


X 


X 


X 


Minimum Set by Lav 






X 












X 


X 


Administrative Inclinations 


X 


X 




X 


X 


X 


X 


X 




X 


Annual Changes in Range Conditions 


X 






X 






X 


X 


X 




Beef Prices 


X** 




X 












X 




Seasonal Values 








X 






X 


X 






Capitalized Value of Land 


X 


X 












X 






Ranch Sales Based on Carrying Capacity 




X 












X 






Prevailing Commercial Leasing Rates 














X 








Conflict Bids 


X 






X 






X 






X 


Lease Offers by Applicant 


X 










X 


X 






X 


BLM Rates 












X 




X 






By Comparison with Set Minimum Values 


X 






X 


X 












Availability or Accessibility of Stock Water 




X 






X 












Revenue Requirements of State 










X 










X 


Availability of Leasing Market 


X 








X 












Variations of Rainfall from Recognized Normals 


X 






X 












X 


Public Opinion 


X 


X 
















X 


Using Industry 


X 


X 


X 


X 


X 






X 


X 


X 



* Less than any other State studied 
** Only slight consideration 



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